Recession-Proof Your Finances

We know, we know -- you’re barely back from your honeymoon, and feeling the economic downturn...hard. But chins up: There’s a lot that you can do to protect yourselves.

Tackle Debt

Why As long as you owe money, it’s difficult to make headway on savings. And, if you lose your job, debt will obviously become a much bigger problem.

How Look for a credit card with a low rate to transfer all your debt to. Just be savvy here -- cards that offer you super-low or zero-percent financing often have major hikes. If you can pay off the debt before the hike, the card may be a deal. Otherwise, sign on for a higher-rate card that will stay constant for the long haul. Negotiating a better rate is always worth a try too.

Borrow Carefully

Why Installment plans and credit cards are traps that let you say, “I’ll pay for it later.” You’re counting on future income, which may not exist in a recession.

How Think (seriously!) before you swipe. The same goes for big-ticket items, like furniture or cars, for which you’ll often see no-interest or even no-money-down plans. Remind yourselves (repeatedly, if necessary): It’s only a good deal if we have the money now and still will when it’s time to pay it off in full.

Start an Emergency Fund

Why You know that irritating expression your parents had about saving for a rainy day? They were right...in case anything happens to your job or health.

How Once your debt’s taken care of, start putting money aside until you have six months’ worth of living expenses (for mortgage payments, groceries, utilities, and medical expenses, not cable TV) saved. Put it in a money market account; they pay better than savings accounts and are easier to access than CDs.